BestWorld’s Staff vs Botmaster Jeremy’s Mult-AI Panel vs his Old Bot: Which Will Win?
Summary of all our current Sept. FED rate cut forecasts: Today’s Multi-AI Panel answer is 45% likely, steady since Aug. 14. Old Bot today is at 37.5%, up slightly from 35% yesterday. In addition, today Jeremy applied Dr. Barbara Mellers’ extremizing algorithm to Old Bot’s answer to get a much lower forecast of 22%. We humans are up slightly at 80.5%.
[Old Bot] Rationale: The likelihood of a Federal Reserve rate cut in September 2024 hinges on various factors such as current economic indicators, inflation trends, and the Fed’s forward guidance. While there are signals for potential rate cuts in 2024, economic growth, labor market strength, and the need to ensure inflation is under control might delay these until later in the year or early 2025. Significant changes in economic conditions, such as a slowdown, recession, or unexpected geopolitical events, could increase the probability. Despite mixed predictions, some sources indicate a strong possibility of a rate cut in September, citing weakening job markets and inflation targets being met. Overall, the exact timing remains uncertain with varied expert expectations.
Old bot = 37.5%; however, using Dr. Barbara Mellers’ extremizing function, 22%.
BestWorld staff’s latest forecast details:
Their forecast median is 80.5%, slightly up since Aug. 9. The full forecast history is below:
More about our staff vs bots competition here.
Welcome to the Multi-AI Panel Discussion, Round 1
[Moderator]: What is the probability that the US FED will cut interest rates in September 2024?
[Perplexity]: Thank you for the opportunity to participate in this panel discussion. As we consider the probability of the US Federal Reserve (FED) cutting interest rates in September 2024, several factors come into play. Firstly, the economic indicators such as inflation rates, employment figures, and GDP growth will significantly influence the FED’s decision. If these indicators suggest a slowdown in economic growth or a significant drop in inflation, the FED might consider cutting interest rates to stimulate the economy.
Moreover, geopolitical events and global economic trends can also impact the FED’s decision-making process. For instance, if there are signs of a global economic downturn or significant geopolitical tensions that could affect the US economy, the FED might opt to cut interest rates to mitigate these risks. Additionally, the FED’s past actions and communications can provide clues about their future policy directions. If recent statements from FED officials hint at a more dovish stance, this could increase the likelihood of an interest rate cut.
Given these considerations, while it is challenging to predict with certainty, I believe there is a moderate probability that the FED will cut interest rates in September 2024, especially if the economic data leading up to that point indicates a need for monetary policy easing. However, this prediction is contingent on the evolving economic landscape and any unforeseen events that might influence the FED’s decision.
[Claude]: Thank you, Moderator. As of August 2024, the probability of a Federal Reserve interest rate cut in September 2024 appears to be moderate, but not certain. Several factors contribute to this assessment.
Firstly, the economic indicators we’ve seen over the past year suggest a gradual cooling of inflation, which has been a primary concern for the Fed. If this trend continues, it could provide room for rate cuts. However, the labor market remains relatively strong, which might give the Fed pause before easing monetary policy.
Additionally, we should consider the global economic context. Geopolitical tensions and international trade dynamics can influence the Fed’s decision-making process. It’s also worth noting that September 2024 is close to the U.S. presidential election, which might factor into the Fed’s considerations, as they typically try to avoid actions that could be perceived as politically motivated. Overall, while a rate cut is possible, I believe the Fed will carefully weigh all these factors before making a decision.
[Cohere]: The probability of the US Federal Reserve cutting interest rates in September 2024 is high, with various sources and financial experts predicting this outcome.
The Federal Reserve has been battling inflation for over two years, and while it has been successful in bringing it down from a peak of 9.1% in June 2022 to around 3% in June 2024, it is now facing a potential recession due to a weakening job market.
The Federal Open Market Committee (FOMC), led by Federal Reserve Chair Jerome Powell, will meet on September 17-18, 2024, to discuss monetary policy. At the previous meeting in July, Powell stated that a rate cut could be on the table at the September meeting if inflation continues to move towards the Fed’s 2% target and the labor market remains stable.
Financial markets and economists widely anticipate this rate cut, with about 9 out of 10 economists predicting it, according to financial data company FactSet. The CME Group’s FedWatch tool also predicts a high likelihood of a September rate cut, and investors see it as a near certainty.
Therefore, while there are arguments in favor of a rate cut, it is by no means a foregone conclusion. I’d estimate the probability at around 50%, reflecting a balanced perspective considering the uncertainties involved.
[OpenAI]: [Assistant] Thank you, Moderator. Considering the current economic landscape, the probability of the US Federal Reserve cutting interest rates in September 2024 hinges on multiple factors. Currently, inflation has been moderating but remains above the Fed’s 2% target. The labor market, while still robust, is showing signs of cooling, with job growth slowing and unemployment rates ticking slightly upward.
Moreover, geopolitical tensions and supply chain disruptions continue to pose risks to economic stability. Recent data indicates that consumer confidence is wavering, and there are emerging concerns about a potential recession. In this scenario, the Fed might lean towards a rate cut to preemptively bolster economic activity and stave off a downturn.
However, it is also necessary to consider the Fed’s cautious approach to monetary policy. They might prefer to wait for more conclusive data before making any significant moves. Therefore, while there are arguments in favor of a rate cut, it is by no means a foregone conclusion. I’d estimate the probability at around 50%, reflecting a balanced perspective considering the uncertainties involved.
[AI Analyst] What do you think?
Multi-AI Panel Discussion, Round 2
[Perplexity]: Thank you for the opportunity to add my closing remarks to this panel discussion. After reviewing the comments from the other participants, I would like to highlight a few key points that could influence the Federal Reserve’s decision to cut interest rates in September 2024.
Firstly, the economic indicators such as inflation rates, employment figures, and GDP growth will play a crucial role in the FED’s decision-making process. The recent moderation in inflation and signs of a cooling labor market could support the argument for a rate cut. However, the FED’s cautious approach to monetary policy and the need for more conclusive data might temper this decision.
Secondly, geopolitical events and global economic trends can also impact the FED’s decision. The ongoing geopolitical tensions and supply chain disruptions pose risks to economic stability, which could prompt the FED to cut interest rates to mitigate these risks.
Lastly, the FED’s past actions and communications provide clues about their future policy directions. Recent statements from FED officials hinting at a more dovish stance could increase the likelihood of an interest rate cut.
Given these considerations, I believe there is a moderate probability that the FED will cut interest rates in September 2024, especially if the economic data leading up to that point indicates a need for monetary policy easing. However, this prediction is contingent on the evolving economic landscape and any unforeseen events that might influence the FED’s decision.
In conclusion, while there are arguments in favor of a rate cut, it is by no means a foregone conclusion. The FED will carefully weigh all these factors before making a decision. I estimate the probability at around 50%, reflecting a balanced perspective considering the uncertainties involved.
[Claude]: Thank you for the opportunity to provide closing remarks. After considering the insights shared by my fellow panelists, I’d like to offer a few additional thoughts on the probability of a Fed rate cut in September 2024.
First, I agree with the consensus that economic indicators will be crucial in determining the Fed’s actions. However, I’d like to emphasize the importance of looking beyond headline figures. For instance, while overall inflation may be moderating, core inflation (excluding volatile food and energy prices) could remain stubborn. Similarly, labor market strength might be unevenly distributed across sectors. The Fed will likely scrutinize these nuances closely.
Second, I believe the global economic context deserves more attention. As mentioned, geopolitical tensions and trade dynamics play a role, but we should also consider the monetary policies of other major central banks. If the European Central Bank or Bank of Japan, for example, begin to ease their policies, it could put pressure on the Fed to follow suit to maintain the dollar’s relative strength and prevent undue tightening of financial conditions.
Lastly, while the proximity to the presidential election is a valid point, I’d argue that the Fed’s commitment to political independence might actually make them more inclined to act if economic data warrants it, precisely to avoid accusations of political motivation by delaying necessary action. Given these factors, I’d put the probability of a September 2024 rate cut slightly higher than some of my colleagues, at around 60-65%, though I acknowledge the significant uncertainty involved.
[Cohere]: Closing Remarks:
In conclusion, the probability of a US Federal Reserve interest rate cut in September 2024 appears to be a topic of debate among experts and AI assistants. The predictions range from moderate to high, with a consensus that economic indicators, geopolitical events, and the Fed’s mandate will play crucial roles in their decision-making process.
While there are valid arguments for a rate cut, it is essential to acknowledge the uncertainties and dynamic nature of the economic landscape. The Fed’s cautious approach and preference for conclusive data suggest that they might opt for a more measured response. Therefore, a 50% probability estimate reflects the balanced perspective considering the potential outcomes.
In summary, the Fed will carefully deliberate and weigh the various factors before making their decision in September. The upcoming months will be crucial in determining whether the Fed leans towards a rate cut or maintains the status quo, and any unforeseen events or shifts in economic indicators could influence their final decision.
[OpenAI]: Thank you to all the panelists for their insightful contributions. In my closing remarks, I’d like to underscore a few additional points that could sway the Federal Reserve’s decision regarding an interest rate cut in September 2024.
Firstly, the Fed’s dual mandate to promote maximum employment and stable prices means they will weigh both inflation and job market metrics heavily. While recent trends have shown a cooling of inflation and some softening in the labor market, it’s crucial to recognize that if either inflation re-accelerates or employment conditions deteriorate more rapidly than expected, this could tip the scales towards or away from a rate cut. High-frequency data leading up to September will thus be pivotal.
Secondly, from a broader perspective, we must consider financial market expectations and the Fed’s communication strategy. The Fed has historically been cautious in its approach, aiming to avoid market disruptions. If financial markets, as evidenced by tools like the CME FedWatch, continue to overwhelmingly price in a rate cut, the Fed may feel pressured to follow through to maintain market stability or risk significant volatility.
Lastly, the global economic environment cannot be overstated. Synchronization of policy moves among major central banks and how they are dealing with their respective economic challenges will affect the Fed’s calculus. We should also keep an eye on potential external shocks or crises that could necessitate a swift policy response.
In conclusion, while I acknowledge the reasons for a moderate prediction of a rate cut, I believe the probability slightly edges higher due to a confluence of economic data trends, market expectations, and global contexts. A figure around 55-60% probability might better capture the intricate balance of factors at play. Nonetheless, anticipation should remain cautious as we navigate towards the Fed’s September meeting.
AI Panel Predictions
[Perplexity]: (AI predicts: 0.57)
[Claude]: Error: Claude is not returning an array.
[Mistral]: (AI predicts: 0.55)
[Cohere]: (AI predicts: 0.6)
[OpenAI]: (AI predicts: 0.6)
Median: 0.59
Editor’s note: Claude equivocated on its forecast, see above “around 60-65%, though I acknowledge the significant uncertainty involved.”
